- of social commerce and the ROI
There’s no question about social commerce as a growing business area, there are however constant discussions about how to find the ROI. Social interaction and 5 star icons on our sites are all fine, but that won’t make us any money – or? How can you know if you can’t measure it? You can, you just need to be smart about it. Let’s start by defining the term Social commerce:
“Social commerce is taking place when e-commerce is affected by or features social interaction. This can be user contributions on site such as ratings and reviews, but also referrals off site or the use of social platforms to sell your product or service.”
For social commerce, as for any other area, e-tailers need to start thinking about what the objective of implementing it is. In order to make it easier to measure and see the actual revenue, go for segments which either have low hanging fruit or areas in strong need of improvement. This could be increase of site traffic, but also areas closer to your actual sale, such as product returns or conversion rate.
- Are you’re looking to increase profit and customer satisfaction? Work on your product information: Give customers an opportunity to add their thoughts about the product and strive for reducing number of returns. Make sure that you clearly display your Q&A section in your customer’s touch points and involve customers and vendors in answering consumer questions.
- Are you hoping to increase conversion rate? Frequently display 4 or 5 star products as they are proven to increase conversion rate, and make sure that you enhance usability on your site so that your customers can actually rate products.
- Is your goal to increase traffic to your site? Provide valuable content that can be crawled by search engines. For a consumer other customer’s reviews are more valuable than any static product information you can provide, make sure this content can be crawled. (Remember to address negative reviews, don’t look at them as a hazard but as golden opportunities to improve your product range and ratings.)
Whatever your objective to join the world of social commerce might be, start by defining macro goals (some of these will surely change along the way), actions and metrics to measure them by. The heart of your strategy should be based on your customer’s instincts and driving incentives. What will inspire them to buy your product?
For anyone starting a social commerce project I would strongly advice to start amplifying social interaction near the buying process of the core product: It’s cost effective, you get to know your customers before possibly taking a more extensive approach and can directly measure and follow your ROI.
April 21st, 2011 at 12:06
Really nice post Frida. We here at OWJO agree with your sentiments. There have been a number of technologies that have sold social commerce as “stick a store app on Facebook and there you have it, social commerce”. But as you have defined here, it is about engaging, listening and conversing with the consumer and creating a continual brand engagement where purchases can take place. Good to see this sort of thinking coming out in the market place. I will be sharing this piece across our platforms!
May 6th, 2011 at 16:13
First of all Philip, sorry for being so late in my reply and secondly: Thank you for the kind words, it makes me happy to hear that you agree on a more hands-on (and less fluffy) approach. Hopefully this is what will drive the market and the ROI forward for all involved parties.
May 9th, 2011 at 10:19
Why brand managers can exhale and e-commerce managers need to inhale says:[...] conversation on platforms which are close to your purchasing funnel. As I’ve mentioned before, the final purchasing decision is often pushed and encouraged by a social interaction (which I why I would recommend integrating social layers near the buying process), whether that’s [...]
May 9th, 2011 at 10:39
Why brand managers can exhale and e-commerce managers need to inhale says:[...] conversation on platforms which are close to your purchasing funnel. As I’ve mentioned before, the final purchasing decision is often pushed and encouraged by a social interaction (which I why I would recommend integrating social layers near the buying process), whether that’s [...]